Correlation Between Oxbridge and Greenlight Capital
Can any of the company-specific risk be diversified away by investing in both Oxbridge and Greenlight Capital at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Oxbridge and Greenlight Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oxbridge Re Holdings and Greenlight Capital Re, you can compare the effects of market volatilities on Oxbridge and Greenlight Capital and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Oxbridge with a short position of Greenlight Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxbridge and Greenlight Capital.
Diversification Opportunities for Oxbridge and Greenlight Capital
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Oxbridge and Greenlight is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Oxbridge Re Holdings and Greenlight Capital Re in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenlight Capital and Oxbridge is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Oxbridge Re Holdings are associated (or correlated) with Greenlight Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenlight Capital has no effect on the direction of Oxbridge i.e., Oxbridge and Greenlight Capital go up and down completely randomly.
Pair Corralation between Oxbridge and Greenlight Capital
Assuming the 90 days horizon Oxbridge Re Holdings is expected to generate 74.53 times more return on investment than Greenlight Capital. However, Oxbridge is 74.53 times more volatile than Greenlight Capital Re. It trades about 0.13 of its potential returns per unit of risk. Greenlight Capital Re is currently generating about 0.08 per unit of risk. If you would invest 8.00 in Oxbridge Re Holdings on August 28, 2024 and sell it today you would earn a total of 14.00 from holding Oxbridge Re Holdings or generate 175.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 69.12% |
| Values | Daily Returns |
Oxbridge Re Holdings vs. Greenlight Capital Re
Performance |
| Timeline |
| Oxbridge Re Holdings |
| Greenlight Capital |
Oxbridge and Greenlight Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oxbridge and Greenlight Capital
The main advantage of trading using opposite Oxbridge and Greenlight Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxbridge position performs unexpectedly, Greenlight Capital can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Greenlight Capital will offset losses from the drop in Greenlight Capital's long position.The idea behind Oxbridge Re Holdings and Greenlight Capital Re pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Greenlight Capital vs. Reinsurance Group of | Greenlight Capital vs. Siriuspoint | Greenlight Capital vs. SCOR PK | Greenlight Capital vs. SiriusPoint |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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